The Influence of Institutions in the Bitcoin Market is Increasing

In recent days, the volatility of Bitcoin prices has drawn the attention of investors. According to CryptoQuant data, the amount of Bitcoin sent to exchanges by small investors has decreased fivefold since the beginning of 2023. This situation shows that the Bitcoin market is increasingly being driven by institutional investors and new whales.

According to data shared by CryptoQuant analyst Darkfost, the amount of Bitcoin sent to Binance by "shrimps," or small investors who hold less than 0.1 Bitcoin, has fallen from an average of 552 Bitcoin daily during the previous bull market in 2021 to only 92 Bitcoin in 2023. This decline has become more pronounced, especially with the onset of spot Bitcoin ETFs expected to launch in January 2024. Before the ETFs, daily inflows were around 450 Bitcoin, which has decreased to 92 Bitcoin during this period.

There are three main reasons behind the withdrawal of small investors from the market. First, some individual investors now prefer to invest in ETFs instead of buying Bitcoin directly. Second, many investors are choosing to hold their existing Bitcoin instead of selling, avoiding exchanges altogether. Third, some regular investors have grown beyond the "small investor" category by reaching higher balances.

In light of these data, while the role of institutions and large investors in the Bitcoin market is increasing, the withdrawal of small investors signals a notable change. Among the key points for investors to monitor are the impact of Bitcoin ETFs and which major players are driving the market.